John Has an Economics Test Tomorrow

question 39

Multiple Choice

John has an economics test tomorrow. He must study and has planned the rest of his day so that he can fit some study time in. He has decided to go to the gym and then study for several hours. Which of the following statements is true?

• A) John did not use the economic way of thinking because his decision on how to allocate his time did not involve money.
• B) John's decision on how to allocate his time is inconsistent with the rationality assumption since he has decided to go to the gym.
• C) John's decision on how to allocate his time is consistent with the rationality assumption since the decision is intended to make him better off.
• D) John's decision does not involve his pursuit of self-interest.

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Definitions:

Book Value

The net value of a company's assets minus its liabilities, often used as a measure of its equity.

Net Income

Net earnings of a firm post the subtraction of taxes, costs, and other expenditures from its aggregate revenue.

Significant Influence

The power to participate in financial and operating policy decisions of a business, but not control those policies.

Database

A structured set of data held in a computer, especially one that is accessible in various ways.